Advantages of Word-of-Mouth Marketing

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So many companies focus on sexy marketing strategies like paid advertising (PPC), social media likes, tweets & follows, and organic search traffic from Google, that far too little attention is given to good old fashioned word of mouth.

I thought I would contrast the huge differences between traffic to my own businesses and compare and review the benefits that I have noticed arising from people making natural recommendations to their friends, families and colleagues.

So, if you are working hard to build up a client/customer base using a wide range of online marketing strategies, take a quick time-out and check out what your business may be missing out on.

What is word-of-mouth?

I think it's worth quickly defining what I mean by word of mouth when it comes to growing a business online.

Word of mouth marketing relies on the natural tendency of people to talk about their experiences with a business and promote it organically in the process.

In other words, you have not solicited a review - there is no incentive offered to them from you. Word-of-mouth is, more often than not, a passive form of marketing.

It doesn't matter what medium it takes place on either. It could be over Facebook amongst friends, it could be at a convention down town, or in a forum, or at a church bake sale.

What are the benefits?

Ok, aside from the obvious fact that having people talking about your SME is good news, there are some pretty subtle advantages that you may not expect.

First and foremost, conversion rates are very, very high on traffic that derives from word of mouth recommendations.

Why?

Understanding: People who have been recommended to your site, generally have a good idea of what they are doing there. They understand what they are going to get because someone has already explained it to them. By contrast, people who drop in from other traffic streams might still need a complete explanation of what you offer, and this takes effort, which in Internet speak means "low conversion rate".

Trust: If someone you know well trusts and recommends something to you, it is far more likely that the level of trust you have in that product or service is higher than an average person. Trust is also a commodity that is in short supply in the online world.

Proof: If someone you know had a good experience with a previously unknown company, it is a good indicator that you will too. In other words, new customers completely bypass the usual suspicion and scepticism that goes with trying something new online.

Positive approach: Many people who arrive expecting great service tend to be very positive in their outlook. For example, if they have a problem, they won't hesitate to drop you a line and ask (because they know that your support will handle their query efficiently - because their friend told them). By contrast new customers are often hesitant to engage with complete strangers.

I guess the quickest way to sum up the benefits is by saying that:

New word of mouth customers convert easily because they come ready-made with trust and confidence in your business.

By contrast, people arriving from advertising , organic search traffic, and other online marketing channels still need to be convinced. They are a step or two behind in the sales funnel.

How to get more word-of-mouth traffic

Unfortunately, it is really difficult to get people talking about your site/service in a meaningful way - especially when your business is small, and especially when it is online.

The business of mine that excels at word of mouth marketing and growth does the following things very well:

customer service

support

engagement

special offers & deals

loyalty offers

friendly

professional

efficient

generous

proactive

I guess the magic ingredient is really contained within a combination of factors that boil down to your approach to people in general. Whatever combination of strategies works for you, there should be one overriding goal,

Transform your word-of-mouth marketing from passive to driven by using a range of strategies designed to encourage customers to share.

I offer refunds to customers for virtually anything because if I know they didn't get the service they were after, then I don't want to take their money. I'm after loyal customers who are going to stick with me - people who drift in and out are less valuable.

I make sure that queries, no matter how stupid (and believe me, there are many) are dealt with efficiently and professionally. Most of the time, customers realize they are being a bit dim, but want someone to help them anyway - they're always grateful for the help.

Also, being very proactive definitely plays a role. Complaints are a gold mine waiting to happen because people using your products and services often have great insight into how you can improve.

By taking note of these complaints, acknowledging there is room to improve (if there is), and showing how you are going to deal with it also makes a fantastic impression. Often this can turn a complaint into praise and... word of mouth.

So that's why I really value the power of word of mouth marketing when it comes to promoting an online business. What tips and advice do you have to get people talking?

Having a great product or service is simply not enough to enjoy strong sales (especially online), which is why it is crucial to build strong relationships with other organizations.

But recognizing that your enterprise can succeed or fail depending on the quality and quantity of the business relationships around you is one thing - finding and nurturing those partnerships is another thing entirely.

This article highlights three techniques that have proven themselves to be invaluable when it comes to ensuring that your company is constantly growing a powerful network of allies.

Any company that outsources their customer service is being silly, and are inviting competitors to swoop in and pilfer their client base.

Customer service is one of the few real opportunities you have to forge a solid relationship with people. Why on earth would you want to hand it over to someone else (who hides you from the people that sustain your business)?

And while handling customer complaints and queries can seem like a chore, it can be converted into one of the most powerful marketing strategies available to you.

When I started my first company some years ago I placed all my focus on creating a great offering, but almost no effort went into sales and networking. Needless to say that it took an incredibly long time to get off the ground - 6 years in fact.

During that time I learned a lot about how business works, and my focus has shifted almost completely onto sales, marketing and networking.

Nowadays, a good idea with a quality product backed by excellent service is the bare minimum required to succeed. Because there is so much competition (especially online), what sets companies apart these days is how effectively they can network and promote themselves.

Startup Today

An SME (Small & Medium Enterprise), sometimes called an SMB (Small & Medium Business), is any business under a certain size. With so many differing definitions, we focus on the people responsible. Smart Modern Entrepreneurs.